Is The Legislature Reading This Blog?
have commented in several posts on provisions of the California Corporations Code that address corporate action in times of emergency. As we were entering the Covid-19 pandemic shut down, I noted General Corporation Law weirdly shackles the ability of corporate boards to take action in times of emergency:
"Section 212(c)(2) states that during an emergency, a board may not take any action that (i) requires the vote of the shareholders (unless, of course, the vote was obtained before the emergency); or (ii) otherwise is not in the corporation's ordinary course of business. The latter restriction is inexplicable because an emergency might be just the very time when a board should take action outside of the corporation's ordinary course of business. I doubt that the legislature intended to impose unreasonable restraints on corporate boards during an emergency, sed quod scripsit, scripsit. Section 212(c) applies to California corporations regardless of whether they have adopted emergency bylaws."
A month later, I observed that Governor Newsom may not have had the authority to permit virtual-only meetings of shareholders. See Dubiety Clouds Gubernatorial Order Allowing Virtual-Only Shareholder Meetings. A few months later, I noted that the Corporations Code does not refer to either epidemics or pandemics. See California's Corporation Code, You'll Find No Epidemics Or Pandemics There.
Now, mirabile dictu, Assembly Member Phillip Chen has introduced a bill, AB 663, that would address all of these issues.
"You've been readin' my mail!
You've been readin' my mail!
Oh, you used to be like ice to me,
Now you're asking me to stay for tea!
It's as plain as A B C,
You've been readin' my mail!"
George W. Meyer & Bob Rothberg, You've been reading my mail.